Questions mount on PM spending and can't be ignored any longer

Comments on Dennis Shanahan “Questions mount on PM's spending”, 1/09/2009, http://www.theaustralian.news.com.au/story/0,25197,26008616-17301,00.html

From the beginning, Labour's stimulus packages had stings and did not smell right, despite being covered by the pitch and excuses of jobs and employment.

While one cannot avoid every waste, the way Labour approached its spending programs showed its poor economic management skills and credentials.

There was no question that the government needed to intervene earlier and at those times. But the key question was how.

To use an example can illustrate this point. One cannot imagine that cash handouts were the best way to use taxpayers’ money to stimulate the economy through stimulating consumption. Why didn’t the government use a consumer purchase rebate/subsidy program that would be directly linked to consumer spending and avoid hoarding? Why did the government use debt that will increase burdens for future taxpayers, to do those cash sprees?

The government’s cash handouts, especially the first one, also had a strong redistribution consequence that was not necessarily optimal given its hastiness.

Now we have all heard the waste in spending on schools and the problems including both waste and no result with Indigenous hosing.

Compared to this, the government has the $43 billion NBN project in its plan. Imagine how big the waste will be with this huge project, considering what has emerged from what has been spent and been shown as waste already?

The Rudd government needs to have a cold shower to become rational. It needs to wake up now and to reflect fundamentally on its economic management, approaches and policies. It must take hard decisions and act responsibly as a government, even though there is not any effective pressure from the very weak opposition so far, because things can change soon and they will change.